It sounds fantastic what is promised on the websites and advertisements of the providers of funded trading accounts. Providers such as Topstep a/k/a TopstepFX or XLtrade promise potential traders that they would not need their own money for trading, but they will provide it. Even though traders don’t need their own funds, they may keep up to 80% of the profits made while the providers bear the losses. Currently, Topstep and XLtrade are doing massive advertising on Google and social media. The catch of the story is that you have to pay setup fees, pass a costly trial period before you may or may not get access to funds.
Funded trading account providers usually offer different funding packages. Topstep, for example, offers up to $500k. Initially, for a test period with simulated trading. But for that, you have to pay $270 p.m. already (screenshot left). At XLtrade, a $1,000,000 fund account costs a set-up fee of $1,590, and then one must test for at least 60 days and meet profit targets. Likewise, one must abide by the rules. Those who do not reach the goals or violate the complicated rules lose their test account and start all over again with new resetting fees.
Many funded trading providers are not licensed, such as Topstep (www.topstep.com and www.topstepfx.com), operated by the unregulated US entities Topstep LLC and Topstep Technologies LLC. Also, XLtrade (www.xltrade.net), operated by the UK-based Chimara Ltd, is not licensed.
Funded trading accounts are not automatically considered a scam. However, the business model is designed to make money via the fees of potential traders. Many reports and reviews speak of rip-off in this context. We will take a look at the individual providers of these funded trading accounts in the coming weeks. Until then, be super cautious. We can promise you with certainty that the probability of winning the lottery is higher than getting rich with these providers.
We have also started discussions to this effect on our Whistle42 forum (link to forum here). So you can either post information for discussion publicly on the forum or send us the information via whistleblower form.